Justices get Nike out of their hair — for now

Friday, June 27, 2003

WASHINGTON — So many legal briefs printed. So much money paid in legal fees. And the Supreme Court even extended the time for oral argument in the case in April from the usual 60 minutes to 70.

But after all that, the Supreme Court disposed of the much-anticipated commercial-speech case of Nike v. Kasky in one sentence yesterday: “The writ of certiorari is improvidently granted.”

That means the Court decided that it should not have agreed to review the case in the first place. It often also means, according to Court folklore, that some hapless Supreme Court law clerk is in the doghouse for having recommended that the justices take the case without focusing on its procedural flaws.

In this case, the flaws were well known early on, and were dealt with in the briefs. Since the Court issued its judgment on the last decision day of its current term, another scenario is possible: that a divided Court ran out of time before it could resolve its differences in the case and simply punted. Chief Justice William Rehnquist is notorious for wanting to dispose of all pending cases before the Court adjourns for the summer, no matter how ragged or unsatisfying the resolution is.

But whatever the reason, the upshot is that the case returns to California courts for discovery and a possible trial, after which the case could return to the Supreme Court — for more briefs, more legal fees and more argument. In the meantime, the California Supreme Court ruling at issue in the case stands — a ruling that said Nike could be sued under California commercial fraud statutes for the statements it made in defense of its labor practices in factories around the world.

That prospect made consumer groups and corporate critics happy, and disappointed corporations and the advertising, public relations and media industries, because it gives corporate speech decidedly less First Amendment protection than they want.

“Nike now faces the prospect of long and expensive litigation over its constitutionally protected public statements on an issue of public concern,” said National Association of Manufacturers Vice President Quentin Riegel, a longtime Supreme Court-watcher. “This litigation threatens many other companies as well, subjecting them to potential liability that their activist opponents do not have.”

Alan Morrison, whose Public Citizen Litigation Group opposed Nike, said that “despite Nike’s prediction that it will be forced to censor itself until this case is finally resolved, we doubt that Nike will shut down its public relations office. What we do expect is that Nike will be much more careful when it tries to influence consumers by making claims about how it treats its overseas workers.”

If there is any consolation to Nike in the case, it is that several justices, in written statements discussing the Court’s action, sent signals to the California courts that the First Amendment issue raised by Nike in the case is real — and weighty.

Justice John Paul Stevens said the case had been dismissed because the California Supreme Court’s decision lacked finality and had come before any trial had occurred at which Nike’s statements could have been evaluated as true or false. Stevens, whose statement was joined by Ruth Bader Ginsburg and David Souter, noted that Marc Kasky, the California activist who had sued Nike, never suffered any injury because of Nike’s speech, having never bought Nike products.

But Stevens suggested that while “novel” First Amendment issues were raised by the case, parties should remember that the Court has given “broad protection for misstatements about public figures that are not animated by malice.”

In a statement explaining why they would have decided the case instead of rejecting it, Justices Stephen Breyer and Sandra Day O’Connor said it was “highly probable” that the litigation and the California law that allowed it “disproportionately burdens speech and that the First Amendment consequently forbids it.”

Their statement also asserted that the important First Amendment issue at stake, and the chilling effect of the California ruling, warranted the Court’s review, even at a preliminary stage. They cited the Court’s 1975 Cox Broadcasting v. Cohn decision, which allows First Amendment cases in some circumstances to be reviewed before a lower court makes a final judgment. Breyer and O’Connor also agreed that a full reversal of the California Supreme Court ruling was a “highly realistic possibility.” Justice Anthony Kennedy also dissented from the dismissal.

But the impact of the Court’s action was evident even as Nike reacted to it during a telephone press conference yesterday afternoon. Nike general counsel Jim Carter said the California ruling placed Nike in a “real difficult circumstance” when it comes to the company’s ability to explain its policies in public. Even as he said it, he seemed to pause, as if it suddenly occurred to him that holding the press conference to react to the Supreme Court action could itself be viewed as a form of advertising or commercial speech — and that it, in turn, could be challenged in court by Kasky or someone else with the California Supreme Court’s blessing.

Tags: ,